Gov Brown Proposes State Worker Pension Changes

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Submitted by ctr70 on October 28, 2011 - 8:33am

This needs to go a lot further. We need to really completely eliminate pensions for Gov workers. They need to create their own retirements with IRA's and 401k's just like all us other worker bees in the private sector. Why should the taxpayer have to pay their fat retirement pensions? Why should we bankrupt our cities, states, cut library hours, cut our school funding to bone, cut other programs just to pay a few retirees their ridiculous pensions?

To me this is this is more of a rape & pillage of society than Wall Street. But the Unions will fight it (huge campaign contributors to Jerry Brown) and the people making the rules get fat tax payer paid pensions too, so the hope for change is small.

Submitted by patientrenter on October 30, 2011 - 3:27pm.

CA renter wrote:

...FWIW, I think the Federal Reserve is the #1 culprit behind the "pension crisis," and the "financial crisis." Their policies -- of not restraining markets that have clearly taken on far too much risk...and then "stimulating" (via artificially suppressed interest rates) when bubbles burst -- have made it nearly impossible to accurately assess risks and invest in a responsible way. Investors are basically *forced* to take on too much risk during the low interest and/or bubble years, and are led to believe that the Fed will cover them tracks when things fail......

I think that is fair. While there are many problems with our system that could bear fixing, none are as critical as the role of the Fed. Greenspan and Bernanke did all they could to inflate unsustainable asset bubbles. Bernanke backstopped all the bailouts. By aiming to prevent the consequences of economic and financial mistakes flowing to the protagonists, he has removed accountability from our financial and economic system. The Fed allowed the current top-heavy distribution of wealth, and the concentration of power amongst a Wall Street-Washington DC axis of the elite, to continue.

Submitted by EconProf on October 31, 2011 - 2:32pm.

Upon more examination, this proposal is not as major as it first appeared. The big changes would apply to future hires, not current lucky employees. So it will do nothing immediately to stop the bleeding and likely implosion of the system, especially since there will be little new hiring given our new austerity. Someone likened it to putting a surcharge on Titanic passengers in order to hire more iceberg spotters.
What's needed is to cut existing benefits, which may be legally impossible since unions can rightly argue they are a contract. And, in fairness, employees have built their personal finances around the expectation of a certain pension.

Submitted by bearishgurl on October 31, 2011 - 10:49pm.

ctr70 wrote:
paramount wrote:
Let's be clear about one thing, I don't think anyone is saying gov't workers shouldn't get a fair salary and savings plan; it's just that right now what they get is unfair to the rest of us who have to actually pay for their benefits.

For the most part, there is no reason gov't workers shouldn't receive benefits on par with those of us in the private sector.

They deserve:

A decent salary
A 401k Retirement account with 50% up to 6% match
A standard medical plan like the rest of us get: $20-$30 co-pays, 4k deductible, etc..

No Pensions
No lifetime medical benefits
Sign them up for social security

Excellent post Paramount, totally agree. I'm totally in favor of Gov workers getting excellent pay, excellent benefits, 401k plans on par with the private sector, but NO tax payer supported pensions and NO healthcare for life. Just like in Greece, these have to go. . . .

LOL . . .

Piggs, would you consider these monthly healthcare premiums for SDCERA retirees who are ineligible for Medicare as "giveaways, taxpayer-supported or better than `standard?'"

see pg 5:

The reality is that these "offerings" are so ridiculously expensive, even for the cheapest HMO, that only retirees with pre-existing conditions signed up for them because they couldn't qualify for a reasonably-priced quality health plan on the open market and for no other reason. As soon as 2014 rolls around, I'm sure the current retirees subscribing to these overpriced, inferior plans are in hopes that they will no longer be at the mercy of being gouged from their "government retirement plan."

The only difference between these plan rates and *exhorbitant* COBRA rates is that they can keep the plan longer than 18 mos!

For many, many SDCERA retirees, these healthcare premiums constitute over 50-75% of their monthly annuity . . . not counting an addt'l premium for any spouse or other dependents they wish to cover as well.


The City of SD negotiated a deal with its unions earlier this year

…Under the proposal, San Diego workers would be required for the first time to contribute part of their paychecks toward the benefit beginning in April 2012, when the deal kicks in.
Older workers would still be eligible for a benefit of $8,880 a year when they retire, but would have to pay $1,200 annually while employed to keep it. Other employees would have the option of a guaranteed $5,500 annual benefit at a cost while employed of $600 annually or a lump sum of roughly $100,000 for health expenses when they retire.

The deal also gives the city an out clause by allowing the City Council to modify retiree health care or eliminate it altogether after the first two years…


PERS and CALPERS 2012 Open Enrollment info below:

FERS retirees seem to have the highest employer participation in their FEHB selections. However, the (HMO) plans themselves leave something to be desired … in comparison with ALL plans, IMHO.


Here are the FEHB fee-for-service plans for 2012 – with a still-reasonable employee contribution:


So much for the notion of "fantastic free or low-cost health care for life on the taxpayer dime."

Submitted by ctr70 on November 2, 2011 - 8:11am.

I have no problem with Gov worker retirees getting pensions or life health care as long as *not a penny of it* is paid by tax payers, or not a penny of it is backed by tax payers (in the case of investment losses by the pension funds). Their benefits should be no different the private sector.

Submitted by UCGal on November 2, 2011 - 9:27am.

ctr70 wrote:
I have no problem with Gov worker retirees getting pensions or life health care as long as *not a penny of it* is paid by tax payers, or not a penny of it is backed by tax payers (in the case of investment losses by the pension funds). Their benefits should be no different the private sector.

I assume you'd be ok with a 401k type plan.
Would you object to a match on 401k contributions?

Submitted by paramount on November 2, 2011 - 9:10pm.

Let's not be distracted by those who inordinately benefit from our inordinate taxes, let's get it on the ballot:

(It's gaining momentum)

Submitted by UCGal on November 2, 2011 - 10:01pm.

paramount wrote:
Let's not be distracted by those who inordinately benefit from our inordinate taxes, let's get it on the ballot:

(It's gaining momentum)

I had to laugh that you linked to the paper from a smallish city in WA state that I used to live in. Gosh I loved B'ham.

Submitted by CA renter on November 3, 2011 - 3:47am.

paramount wrote:
Let's not be distracted by those who inordinately benefit from our inordinate taxes, let's get it on the ballot:

(It's gaining momentum)

Dumbasses... They're spending lots of money when the governor's proposed the very same thing already.

Let's see who's behind this anti-union propaganda, shall we?

Pension Reform President Dan Pellissier said the group is now trying to raise the millions needed to gather signatures and eventually mount a campaign against well-funded public employee unions.

Read more:

"Some recipients of BP tickets are playing key roles in crafting the climate law's landmark environmental policies... It also gave Kings tickets to Dan Pellissier, then the deputy secretary for energy policy at the state environmental protection agency; Pellissier is now a deputy cabinet secretary advising Governor Arnold Schwarzenegger on energy and environmental policy."

"John D. Arnold, a former Enron Corp. trader in Texas who became a billionaire by buying and selling natural gas, is bankrolling a group supporting changes to limit California’s pension-fund obligations.

Arnold, who formed hedge fund Centaurus Advisors LLC in Houston after leaving Enron, started a foundation that Meredith Simonton, a spokeswoman, said has given $150,000 to the California group.

The organization set up by Arnold and his wife, Laura, a lawyer, plans to be involved in pension-overhaul efforts around the U.S., Simonton said by telephone from Houston. State and local governments confront “massive financial distress” from the gap between assets and promised benefits, she said.

Their foundation, like the one run by Fritz, is restricted from political activities as a 501(c)3 tax-exempt organization under U.S. law.

“I can’t say, ‘Go for this’” proposal because of that tax status, Fritz said Aug. 8. In promoting a bipartisan legislative approach, she said, “I’m looking to avoid the fights we’ve seen in Wisconsin and New Jersey.”

Her organization and the one backing the ballot measure are opposed by a union group called Californians for Retirement Security. Steve Maviglio, a spokesman, has sought to compel Fritz to disclose her foundation’s financial backers.

“Clearly, transparency is an issue,” Maviglio said by telephone last week. “Voters deserve to know who’s paying for their propaganda.”

[Hmmm...I'm seeing an "energy industry" relationship here. How about you, paramount? Still think it's about "pension reform," or have your eyes been opened to the true nature of the attacks on unions (privatization of public assets and revenue streams). Follow the money... KNOW **WHO** IS BEHIND THE ATTACKS ON UNION WORKERS AND KNOW **WHY** THEY ARE DOING IT. -CAR]

Pellissier said the plan has united several leading pension reform advocates, including former California Republican Party Chairman Duf Sundheim and former GOP Assemblyman Roger Niello.

So far the group has spent about $250,000 on polling and legal help to write the proposals. The largest chunk of that money came from billionaire John D. Arnold, a former Enron Corp. trader who became wealthy buying and selling natural gas for the now-defunct energy firm.

Read more:


"Duf Sundheim has been active in Republican Party politics for over 30 years beginning with his service as a page in the Illinois State Legislature at age 18 and working in the trenches as a campaign advance staffer for the Illinois Republican U.S. Senate candidate in 1974. Duf also had a record setting term as Chairman of the Lincoln Club of Northern California."

"Mr. Sundheim was Chairman (2003-06) of the California Republican Party during one of the most critical times in its history. Shortly after Mr. Sundheim was elected in 2003, California had its first recall of a sitting Governor and elected Arnold Schwarzenegger Governor. Mr. Sundheim's election itself was historic, as it marked the first time in 38 years the seating Vice Chairman had not been elected Chair. In February of 2005, Mr. Sundheim became the first Chairman in the history of the CRP to be re-elected to a consecutive term. In three years, with the active support of Governor Schwarzenegger, the CRP has raised over $100 million dollars, an unprecedented figure."

[Friends in high places? -CAR]


"The head of an upstart group that aims to recruit California Republicans to run for statewide offices earned $900,000 in salary and benefits in the 2007-2008 election cycle, angering some Republicans who wondered Monday if the cash is being well-spent.

Duf Sundheim, former California Republican Party chairman, collected the money while launching California Republicans Aligned for Tomorrow, according to reports that the 527 political group has filed with the Internal Revenue Service.

The group was officially made public in 2008, though Sundheim said he started working on the GOP candidate development and recruitment efforts in 2007.

It was backed with $100,000 pledges from more than a dozen major supporters of Gov. Arnold Schwarzenegger, including businessmen Lawrence Dodge and Paul Folino. Over the two-year period, the group raised $1.4 million and paid much of it to Sundheim.

Details of Sundheim's pay package, including salary, medical and automobile expenses that topped $43,000 a month, were first discussed on Republican blogs over the weekend.

[Holy cow! THIS is the guy criticizing public employees' compensation????? Gee, I wonder which "bought politicians" these guys are trying to get elected. I'll go out on a limb and guess that they have nothing to do with "taxpayer advocacy." -CAR]

Read more:


[Uh-oh. Looky here at what Mr. Lawrence Dodge has been up to. -CAR]

"A federal agency has concluded former bank president and co-CEO Lawrence Dodge violated the law, breached his fiduciary duties, engaged in unsound business practices and filed false and misleading reports, including claims of proceeds from a $2 million loan to the California Republican Party that did not exist.

At different times, American Sterling claimed to OTS the bank was "well-funded" or "adequately funded." This was based on Dodge telling his board of directors that the bank received contributions from loan proceeds from $2 million his parent company gave to the California Republican Party and $400,000 to Millennium Gate Receivable, a real-estate investment.

[Why is a MO banker interested in California's pensions? There's a lot more to this story, but don't want to make a long post even longer. Do your research. -CAR]

[More stuff about Lawrence Dodge. Apparently, he thinks public employees make too much, but is "donating" millions (and then not paying for it, though claiming credit for it) in order to get buildings named after himself. -CAR]

And Roger Niello:

"In addition, Assemblyman Niello’s legislation to authorize the state to participate in Public Private Partnerships for infrastructure projects provided a template for the language in the most recent budget agreement.

Additionally, Assemblyman Niello has introduced legislation to bring about innovative reforms to our method of contracting public infrastructure..."

[Anytime I hear about "Public-Private Partnerships," I think "fraud and corruption." But, that's just me... -CAR]

"The formation of a 527 is curious, too.

[A]fter all, there’s nothing stopping the California Republican Party or the New Majority Political Action Committee, of which Dodge and Folino are board members, from building a farm team of prospective statewide candidates.

But a 527 is a federal entity and not subject to California campaign contribution or spending restrictions, although it must disclose its donors and expenses. (Click here to look up CRAFT’s filings on the IRS web site.)

Dodge, Folino and the New Majority PAC are among those who donated $100,000 each, along with William Lyon of Lyon Homes, the San Diego Chargers and Baron Real Estate CEO William Bloomfield Jr.

As CRAFT’s CEO, Sundheim earned $20,833 in each of the first three months of 2008 plus expenses, according to the filing."


Looks like real estate and fiance people like CRAFT.

"We're taking it one step at a time," Pellissier said, noting that former U.S. Secretary of State George Schultz has agreed to raise money for the effort.

Read more:

So, we have finance, energy, and real estate being pretty heavily represented here. Any of those helped you (or any other taxpayers) out lately, paramount?

Submitted by CA renter on November 3, 2011 - 3:49am.

ctr70 wrote:
I have no problem with Gov worker retirees getting pensions or life health care as long as *not a penny of it* is paid by tax payers, or not a penny of it is backed by tax payers (in the case of investment losses by the pension funds). Their benefits should be no different the private sector.

Conversely, one might suggest that the private sector should try to match the pay/benefits of the public sector. They're sitting on record profits, and have plenty for outlandish executive compensation, after all.

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